Starting A Business In Belize: A Comprehensive Guide

Belize is a great place for foreigners to start a business, with the government actively welcoming and facilitating foreign investors. The country offers ample opportunities for virtual and brick-and-mortar ventures, and small businesses make up over 90% of the country's enterprises. Here are the key steps to starting a business in Belize:

1. Registering key business details: Choose the type of company, such as an International Business Company (IBC) or Trust, and register your business name, address, and other crucial details with the Companies and Corporate Affairs Registry.

2. Acquiring a trade license: Obtain a trade license from the Town Board or City Council if you intend to exchange goods and services for financial compensation within an urban area. This is required for almost all businesses.

3. Income Tax Registration: Register with the Income Tax Department and obtain a unique Tax Identification Number (TIN).

4. General Sales Tax (GST) Registration: Register for GST if your business has an annual turnover exceeding BZ$75,000 (US$37,500).

5. Social Security Registration: Register for social security with the Belize Social Security Board if you employ one or more persons.

Other important considerations include opening a bank account, obtaining necessary licenses (e.g., food handlers, liquor, hotel), and understanding the tax structure, which includes various exemptions for foreign investors.

Foreigners are facilitated: The government welcomes foreign investors and helps them navigate the process

The Belizean government welcomes foreign investors and has demonstrated its commitment to this by enacting legislation to attract foreign investment, such as the International Business Companies Act. The country offers 100% foreign ownership of companies and land, and has a straightforward process for company registration.

The government has also implemented several incentive programs to promote investment in the country, including the Fiscal Incentives Act, the International Business and Public Companies Act, the Export Processing Zone Act, and the Commercial Free Zone Act. These programs offer benefits such as tax exemptions and duty-free importation.

In addition, the government has amended the Fiscal Incentives Act to provide additional incentives for investments over US$250 million, including duty and tax exemptions for project construction costs and the importation of household effects and equipment for skilled foreign workers and managers.

While there are challenges to doing business in Belize, such as high telephone and internet access fees, and a tedious process for acquiring land, the government has demonstrated its willingness to support foreign investors through these various initiatives and legislative changes.

The process of starting a business in Belize is relatively simple and streamlined, with six steps to formalizing a business. The first step is to register the business name, which is a one-time, one-day process that can be completed at the Companies & Corporate Affairs Registry in Belmopan. This is followed by obtaining a trade license, registering with the Income Tax Department and Government Sales Tax Department, and registering for social security. The final step is to register and protect the business's intellectual property.

Overall, the Belizean government has put in place a number of measures to facilitate foreign investment and make the process of starting a business in the country more accessible.

Off-shore business exemptions: Foreign nationals can establish remote businesses from anywhere in the world

Belize is a tax haven, allowing individuals and corporations to legally reduce their tax liabilities. The country has favourable policies for foreign nationals looking to establish a business.

Belize's International Business Companies Act makes it simple to incorporate offshore companies. The country does not share information with international taxing authorities, providing corporations and individuals with confidentiality.

Foreign nationals can establish a business in Belize from anywhere in the world. The country's tax code defines offshore income as dividends, capital gains, earned interest, and revenues. Dividends paid by offshore companies incorporated in Belize to non-citizens are also tax-free.

The process of becoming a tax haven began in the early 1990s when the Belizean government took cues from the legislative practices of many Caribbean countries. The government's primary objective was to eliminate taxes on a wide range of income sources, including dividends, interest, capital gains, and revenues earned offshore. To create a pure tax-free environment, the country also eliminated its stamp duty.

The country also established the International Business Companies Act, the Trusts Act, and the Offshore Banking Act in 1996 to fast-track the incorporation of businesses, trusts, and foundations. As a result, Belize is considered one of the most corporate-friendly nations globally. The incorporation process can be completed within a few hours, granting tax-free status with no reporting requirements.

The Trusts Act provides a permanent exemption from personal and business taxes on earnings generated by assets in a trust. Estates also receive comprehensive exemptions from taxes related to inheritance, succession, and gifting.

The Offshore Banking Act allows financial institutions with a minimum of $25 million in capital to apply for an unrestricted license, allowing for banking operations without local regulation. Smaller institutions can apply for a limited license by meeting a $15 million capital requirement.

Belize has progressively established itself as a tax haven, taking the place of traditional havens like Switzerland and Luxembourg, where financial privacy barriers have weakened. To secure the financial privacy of companies, foundations, and trusts incorporated in the country, banking regulations mandate that names and account information can only be disclosed after the submission of documentation related to criminal investigations, followed by a court order.

Belize also has few tax treaties with other governments, allowing for stronger financial privacy protections. The country imposes no restrictions on currency movements in and out, allowing offshore businesses to transfer unlimited amounts without reporting requirements.

Small businesses are popular: Over 90% of businesses in Belize are small and started with minimum capital

Belize is a small, sparsely populated country with a complex legal system. The government and business owners need to be aware of the Belize Constitution, Business Law, and Commercial Code to operate in the country. The regulatory environment is friendly and supportive of small businesses.

Belize is also a tax-friendly country with no minimum paid-up authorised capital required for incorporation. However, Tetra Consultants recommends setting aside at least US$5,000 as paid-up capital to fund overhead expenditures and the initial deposit for a business bank account.

There are six steps to formalising a business in Belize:

• Business name registration: This is a one-time, one-day process undertaken at the Companies & Corporate Affairs Registry in the City of Belmopan. The necessary documents include a valid Social Security card for all owners/partners and a fee of BZ$25.
• Trade license acquisition: Any person exchanging goods or services for monetary value within an urban area must obtain a trade license from the Town Board or City Council. The annual trade license fee is typically calculated at 25% of the annual rental value of the premises.
• Income tax registration: All businesses must register with the Income Tax Department and Government Sales Tax Department. A unique Tax Identification Number (TIN) will be issued.
• GST registration: All persons engaged in a taxable activity with an annual turnover exceeding BZ$75,000 must register with the Department of Government Sales Tax.
• Social Security registration: According to the Social Security Act, persons who employ one or more persons must register for social security with the Belize Social Security Board within seven days of employing the first employee.
• Registration/protection of intellectual property: This is done by visiting the Belize Intellectual Property Office in the City of Belmopan.

The above steps outline the process of starting a small business in Belize with minimum capital. It is recommended to consult with an experienced business lawyer or accountant to guide you through the process and help determine the best corporate, accounting, and tax structure for your venture.

Tax-free income: Foreign nationals can enjoy profits without paying taxes

Belize is a tax haven, allowing individuals and corporations to legally reduce their tax liabilities. The country's tax code defines offshore income as dividends, capital gains, earned interest, and revenues. Dividends paid by offshore companies incorporated in Belize to non-citizens are also tax-free.

Belize does not share information with international taxing authorities, providing corporations and individuals with confidentiality. However, U.S. residents must still report earnings to the IRS unless their company does business solely in Belize.

The country's status as a tax haven is due to its favourable tax policies and privacy protections. Belize has no capital gains tax, and taxes on a wide range of income sources, including dividends, interest, and capital gains, have been eliminated. The country also removed its stamp duty, a tax charged to certify the veracity of documentation for incorporating companies, trusts, and foundations.

Additionally, Belize offers permanent exemptions from personal and business taxes on earnings generated by assets in a trust. Estates also receive comprehensive exemptions from taxes related to inheritance, succession, and gifting.

The incorporation process in Belize can be completed within a few hours, granting tax-free status with no reporting requirements. This is facilitated by the International Business Companies Act (IBCA), which was established to fast-track the incorporation of businesses, trusts, and foundations.

While Belize offers these tax advantages, it is important to note that there are still reporting requirements for U.S. residents and potential challenges associated with the country's reputation as a tax haven.

Investment leads to residence: If you invest in Belize, the country offers you a residency permit

Belize is an attractive prospect for investors, with its beach lifestyle and untapped potential in several sectors. The country offers a range of visa and residency options, with the possibility of citizenship after five years of permanent residency.

One of the most appealing options for investors is the Qualified Retired Person Incentive Program (QRP). This program grants residency to individuals aged 45 or older, who can prove a foreign source pension or annuity, or another acceptable source of income of at least $2,000 per month. The program includes zero-duty importation on vehicles and personal items during the first year, and after one year of legal residence, individuals can apply for permanent residency.

Another option for investors is to obtain residency through investment. Belize offers multiple incentive programs aimed at promoting investment in the country, including the Fiscal Incentives Act, the International Business and Public Companies Act, the Export Processing Zone Act, and the Commercial Free Zone Act. These programs provide various benefits, such as duty and tax exemptions, and the ability to include dependents.

The process of starting a business in Belize can be hassle-free if you understand the steps involved. Here is a brief overview of the key requirements:

• Business Plan: Develop a comprehensive business plan that identifies your competitive advantages, strengths, and weaknesses. This will be crucial for obtaining financing from banks, investors, or funding agencies.
• Registration of Business Name: According to Belizean law, every firm or individual with a place of business in the country must register their business name. This can be done at the Belize Companies Registry in Belmopan, with a processing time of around 3 hours and a fee of BZ$25.00 (US$12.50).
• Incorporation of a Company: Prepare and submit the Memorandum of Association and the Articles of Association to the Belize Companies Registry for review. After approval, you will receive a Certificate of Incorporation. The processing time is similar to the previous step, and the fee depends on the quantity of share capital.
• Land Acquisition and Development: If you require land for your business, submit an application to the Commissioner of Lands, specifying the location and acreage. For applications exceeding 25 acres, a development plan must also be submitted to the Minister of Natural Resources and the Environment.
• Trade License: Obtain a trade license from the local city or town council. The final approval will be based on the recommendation of the Trade Licensing Board, and the fees will be determined based on the annual rental value of the premises.
• Registration for Taxes: Register for relevant taxes, such as General Sales Tax (GST), Business Tax, Income and Business Tax, and Social Security Tax. The requirements and thresholds for these taxes vary, so it is important to consult with a professional to ensure compliance.

It is worth noting that starting a business in Belize comes with certain challenges. The country faces issues such as high fees for telephone and internet access, erratic and expensive electricity supply, and a tedious process for acquiring land. Additionally, doing business in Belize requires navigating heavy-handed government red tape, and the overall ease of doing business is ranked relatively low by the World Bank.

Therefore, it is advisable to seek the assistance of a competent accountant or attorney when establishing a business in Belize. They can guide you through the process, help you determine the best corporate structure, and ensure compliance with the various tax and legal requirements.

Frequently asked questions